Gulf funds inflow set to surge

The disturbances in west Asia coupled with the India growth story is paving the way for a rise in Shariat-compliant Islamic investments and in the next one year a whopping $1 billion is expected to come in the market through this channel.

"In the last few months the amount of Islamic investment has been around $750 million and hence the potential of this market is huge," said R K Gupta, managing director of Taurus Asset Management.

The company is planning to launch a couple of sectoral funds in the next fiscal.

It would apply to Sebi by the end of this month, for an energy and power fund and an agriculture fund, he said while talking with the media on the sidelines of a conference on Shariat investments.

Taurus is also waiting for regulatory approval for Islamic Mutual Fund which is expected to mop up Rs 500 crore.

The fund would be launched along with Ahmadabad-based Islamic investment firm Parsoli Corporation which would be first of its kind in the country.

The scheme will not invest in companies providing financial services with interests in conventional banks, insurance companies or companies involved in businesses not approved by Shariah such as companies manufacturing, selling or offering liquor, pork meat, or involved in gambling and night club activities.

Meanwhile, Parsoli along Germany-based Baader Service Bank, is planning to float an Asset Management Company (AMC) to tap the investment potential of Islamic investors.

"We have got the necessary infrastructure in place for the AMC, which we want to set up in the next 18 months with Baader Service Bank providing the necessary technical expertise," said Zafar Sareshwala, chief executive officer and managing director of Parsoli Corporation Ltd.

He added that currently more than 60 percent of the stocks listed at the various exchanges in the country are Shariah-complaint. Parsoli is a BSE and NSE member and offers the Muslim investors, the option to trade in listed Shariah-complaint stocks.

In addition to this, Baader Service Bank, is coming in with a corpus amount of 30 million euros for its "First India Islamic Fund" in Germany and the fund is waiting for the FIS status from the Reserve Bank of India. This fund will be put in Shariat-compliant Indian companies verified by Parsoli.

"We have developed an Islamic investment model, which identifies companies that are Shariat complaint so that Muslims can invest in their stocks," said Sareshwala.

The company has also compiled a Islamic Equity Index comprising the most liquid stocks of Shariah-compliant companies listed on NSE and BSE.